Public pension debt: How big is it?

While not complying with an apparently flawed state law, CalPERS is opposing a similar federal bill calling for a report showing how pension debt could soar if long-term investment earnings are well below average.

How public pension funds report their long-term debt, and its impact on future payments needed from government employers, has become an issue in the politically charged debate over pension reform.

Or do pessimistic forecasts needlessly alarm the public and aid those who want to switch government workers to 401(k)-style plans?

The debate centers on the fact that public pension funds, once limited to bonds, now expect to get two-thirds or more of their revenue from stocks and other risky investments — a funding source that can only be estimated, not predicted with precision.

For example, bill analyses show legislators were told that earnings and surpluses would pay for a major pension increase for state workers, SB 400 in 1999, and a contribution cut and new retirement supplement for teachers, AB 1509 in 2000.

Public pension earnings forecasts, often 7.5 to 8 percent, are well above the forecast used by private-sector pension funds, now 5 to 6 percent. The rationale is that companies, unlike governments, can go out of business and need more caution.

Last year, the debate moved to a new level when Stanford graduate students issued a report arguing that the unfunded liability of the three state pension funds is $500 billion, not $55 billon as the funds were reporting.

The students, following the view of some economists, used an earnings forecast based on a risk-free bond rate, 4.1 percent, rather than the forecasts based on a diverse portfolio, 7.5 to 8 percent.

The economists argue that because the pensions are risk free, guaranteed by taxpayers, the assets should be valued the same way, with a risk-free government bond rate. It’s said to be how insurers would charge to take over pension obligations.

The Stanford study used data prior to the stock market crash in fiscal 2008-09, when the state funds were underfunded, but not as much as now. The study dropped the earnings forecast by nearly half, causing the debt or “unfunded liability” to soar.

The California Public Employees Retirement System unfunded liability jumped from $39 billion to $240 billion, the California State Teachers Retirement System from $16 billion to $157 billion and UC from $600 million to $29 billion.

The study estimated that when market-crash investment losses are added to the total $426 billion risk-free debt calculation, the unfunded liability of the three state funds is more than $500 billion.

“Unfortunately, I think most people would give this a letter grade of ‘F’ for quality,” Jack Ehnes, the CalSTRS chief executive, told his board in April of last year when the Stanford study was issued.

CalPERS said, among other things, that its investments earned 7.9 percent during the last 20 years and, with “high certainty,” can earn more than the risk-free rate in the future, continuing to save tax dollars by providing billions to finance pensions.

CalPERS left its forecast at 7.75 percent in March, instead of dropping to 7.5 percent as advised. The actuaries said no change would still be “reasonably” prudent, noting that a lower forecast would raise costs during a time of deep government cuts.

CalSTRS dropped its forecast from 8 to 7.75 percent in December, not to 7.5 percent as advised. Teacher groups said a lower forecast could reduce member benefits by raising the cost of annuities and service credits purchased to boost pensions.

A lower CalPERS forecast would have quickly raised employer rates, erasing savings from new labor contracts that cut pension costs. The CalSTRS board lacks the power to raise employer rates, needing legislation not expected any time soon.

How missing the earnings target, even by a relatively small amount, can increase pension costs was the aim of a “transparency” bill in a state budget package enacted last October.

“There were people that pulled wool over their eyes,” former Gov. Arnold Schwarzenegger said, referring to CalPERS telling legislators that the SB 400 pension increase in 1999, now said by critics to be “unsustainable,” would not increase state costs.

“They never really knew all the facts and the risks that were involved,” Schwarzenegger said. “Now this will be eliminated, this problem. We will have full transparency moving forward.”

When CalPERS sets new employer rates, the transparency bill, SB 867, requires a report showing how the rate would increase if earnings fell below the target — either 6 percent or one percentage point below the target, whichever is lower.

Among several other things called for by the transparency bill is a calculation of CalPERS liabilities based on a risk-free earnings forecast or discount rate: the 10-year U.S. Treasury note.

Since the transparency bill was enacted, CalPERS has set state rates twice, lowering them in December and again in May to reflect more than $400 million in savings under new labor contracts.

But CalPERS has not made reports required by the transparency bill “any time” rates are set.

A Senate bill analysis said CalPERS compliance would be “discretionary” because Proposition 162 in 1992 gives CalPERS sole power over actuarial services. In addition, the nonpartisan Legislative Analyst said the new law has drafting flaws.

The bill could require additional actuarial calculations and reports to the Legislature each time the giant CalPERS sets rates for 2,200 state and local plans. The analyst said the risk-free rate calculation may be more “alarmist” than useful.

A new transparency bill, AB 1247, requires a report showing employer rates if the earnings forecast is 2 percentage points below or above the CalPERS forecast, currently 7.75 percent, but does not call for a risk-free rate calculation of CalPERS debt.

The new bill, approved 75-to-0 by the Assembly, is scheduled to be heard by a Senate committee today. CalPERS supports the bill but suggests the report be based on earnings one percentage point below or above the target, not two points.

In Congress, high on the agenda of lobbyists for CalPERS and CalSTRS is opposition to HR 567 by U.S. Rep. Devin Nunes, R-Visalia, which requires public pension funds to report debt with an earnings forecast based on risk-free U.S. Treasury bonds.

Nunes and a CalSTRS lobbyist haveboth talked about the potential impact of the bill on the drive by some to switch public pension funds to the 401(k)-style individual investment plans now common in the private sector.

Reporting pension debt with a risk-free bond rate received nonpartisan support last year from Alicia Munnell at the Center for Retirement Research at Boston College and last month from the Congressional Budget Office.

But a new front could open in pension-debt reporting under a proposal mentioned last week by Robert Attmore, chairman of the influential Governmental Accounting Standards Board.

Hereportedly said GASB will propose this week that state and local pension funds report their unfunded obligations as if they were being paid off during the remaining years on the job of persons covered by the plans.

One estimate was that the average pension fund now reporting the debt as if it were being paid off over about 25 years would have to shorten the period to 10 to 15 years, increasing the debt.

“We want people to be transparent and disclose exactly what it is they’re doing, and the market will make their judgments based on that,” Attmore said as reported in the Wall Street Journal. “The economics don’t change.”

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 27 Jun 11

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39 Responses to “Public pension debt: How big is it?”

What still amazes me is that taxpayers don’t scream bloody murder that CalPERS, whose PROPER roll should exclusively be that of Plan administrator, investment manager and fiduciary, has morphed into one of Participant advocate.

It’s obligation to TAXPAYERS should certainly be superior to those of the participants.

Lowering the assumed rate of earnings is a good move. The result should be further lowering of benefits, which have been raised too high due to 20 years of bull markets.

It is incorrect to view a change in assumed rate of earnings as valid pressure to switch to 401(k)/DCPs. They will not earn a higher rate of earnings, and are generally a lot more expensive for the same benefit than are DCBs, primarily for two reasons: 2) everyone must plan to live until 95 if they have their own DCP, where a pooled pension plan like a DCB can assume survival until only 85, which is true for large pools of people; 2)market fluctuations are smoothed by the continuous contribution/withdrawal by the large numbers of people in a pooled system.

Annuities do not reproduce the benefits of DCB’s over DCP’s. The most economical pension systems are well-run DCB’s that do not overpromise benefits.

Realizing that money is money and that tax money DOES flow from one pot to another, I wonder who would like to see this same sort of scrutiny devoted to a Military Budget that spends 60 cents of every Federal tax dollar ? I sure know I would ! How about YOU, ToughLove ? Would you prefer to see taxes going to SSA/ Medicare/ Pensions or to a bloated, unaccountable Military that spends more than all of the other NATO nations combined and six times more than China ? This is a value system question; what do you value ? You’re on theses all of the time and I bet others besides myself are curious…

TL, the CalPERS members are all taxpayers, and have just as much right to weigh in on issues of taxation, as any other CA resident. (I think that CalPERS should be able to exact an administration fee from the respective retirees who live out of state, and pay no state income taxes to CA, but that is not under my control.) CalPERS has the fiduciary responsibility to administer and protect the trust fund for its members. You would only be happy if CalPERS were to shut down and decide not to pay its annuitants. CA is only 12th or 13th in total taxation. Perhaps you should turn your attention to New Jersey.

Quoting spension (above) …”They will not earn a higher rate of earnings, and are generally a lot more expensive for the same benefit than are DCBs”

The key words in the above quote are “for the same level of benefits”.

That’s the current problem. Current Civil Servant pensions are 2, 4, even 6 times greater in value than Private sector Plan. We need to replace the current overly rich DB Plans with MUCH MUCH LESS GENEROUS DC Plans.

Responding to FLAK88: I agree wholeheartedly …. the military budget is ridiculous. However, 2 wrongs don’t make a right. Even if we overspend on the military, it certainly does not justify the grossly excessive pensions and benefits afforded Civil Servants, 80-90% of which is paid for by TAXPAYERS’ contributions (and the interest earned thereon).

The workers only pay for 10-20% of their excessive pensions & benefits. That’s outrageous and needs to be changed now.

Quoting SeeSaw, …”TL, the CalPERS members are all taxpayers, and have just as much right to weigh in on issues of taxation, as any other CA resident.”

Absolutely, but since the members only represent about 15% of all CA taxpayers, their preferences for more & more & more should only be given a proportionate weight of 15% in the decision-making process. Right now, it seem that CALPERS decision-making ignores the OTHER 85% of CA taxpayers who are NOT CalPERS members.

And no, I would NOT be ..”happy if CalPERS were to shut down and decide not to pay its annuitants. ” However the mess CA’s is in today would certainly be considerably smaller if in 1999 CalPERS member-controlled Board didn’t pass SB400 (with the huge RETROACTIVE increase in pensions) by ignoring all the warning signs.

No, Tough Love, $1 of taxpayer money deposited in a DC plan is less economical than $1 deposited in a DB plan.

I don’t know why you want to waste taxpayer’s money.

The whole issue of military pensions gets scant attention… as far as I know, they are pay as you go entirely.

Whereas in a public pension system about 70% of the benefits come from investment earnings, 20% from the taxpayer, and 10% from the employee, I believe in the military 100% comes from the taxpayer. Odd. Of course reasonable pensions are important for our veterans, it is just that the funding model is peculiar.

It is certainly odd that we pour a trillion or two or three into Iraq and Afghanistan while cutting education and public safety in the US.

CalPers started the year with 225.7B in assets. They now have 232.2B, or a additional 6.5B. That means halfway through the year assets have only grown by 2.9%, well short of the 8% (7.75% net, or the 4% for the first half of the year) they need to return. Actually, the entire increase in assets can probably be attributed to employer/employee contributions which means that investment returns for the first half 2011 are probably close to zero.

Calpers needs to return close to 16% (15.5% net) over the next six months if they are to achieve their target goal.

Unfortunately, even if they’re able to pull that off the hole still gets deeper. CalPers funding assumptions are based on beginning at 100%. They began the year at less than 70% funded. For instance:

$100 *7.75% return = $107.75, or a gain of $7.75

If $7.75 is your target ROI, and you only have $70 to invest (Calpers 70% funding ratio), you need a return much greater than 7.75%, to achieve a ROI of $7.75. So, even the 15.5% number is grossly understating the pressure on the calpers investment staff. It’s doubtful they can meet their goals which means the pressure will be transfered to municipalities and taxpayers in the form of even more ever-increasing employer contribution rates.

spension …….. you know less than you think you do (I’m in this business) and I know your thinking is stuck and can’t be swayed.

Bottom line …. Public Sector pensions are too generous, and therefore too costly. They need to be significantly LOWERED (by 50+% minimum) for future service. How we get there (via DB or DC) matters little. But, DC (by design) puts a fixed cap on taxpayer’s risk, so if we stay with DB, we need to make the employee, (not the taxpayer) the balancing for asset shortfalls when investments go sour. That can be done by formula-driven employee contributions tied to investment performance.

CALPERS fiscal year runs July1 to July 1. They use their asset value as of June 30 each year to set the next years contribution.

CALPERS started July 1, 2010 with $201 billion dollars. Using your $232 billion as of today, that means they have earned nearly 16% return for their fiscal year. That would be double their assumed rate of return.

Matt, $10B of that $$232-$201B=$31B increase is from contributions. Only $21B is earnings. Not bad… but hardly enough to keep the Plan afloat long-term given past losses, and what most economists expect long-term returns to be.

I know what calpers reporting period is but I’ve seen them also report, in news accounts, calendar year returns. It doesn’t change the fact that the last six months have been dismal. Calpers keeps citing that they are almost 70% funded like that is a good thing. I think those numbers are probably refering to the state plans. In the most recent valuations for my city, from the valuation reports received in december of 20110, for the period ending June 30, 2009, the funding status is as follows: Misc employees – 52.2%, fire employees – 56%, Police – 60.1%.

Calpers is so far behind the eight-ball they are forced to make even riskier investments during what many are calling an new era that warrants a more conservaive strategy. I don’t like what calpers has been doing and I don’t want them gambling with our future. As of now city budgets are already crumbling under the weight of increased pension contributions – and those contribution costs are grossly understated. Calpers flawed policies regarding smoothing and the discount rate are leading this state toward disaster. What is calPers doing other than continuing to ignore the advice of their own actuaries and consultants while protecting & defending the unions pension scheme.

Tough Love, we can agree on one thing then… those who ran our government DB systems were mistaken and overpromised benefits, which was and is the big problem.

And then our government entities are legally bound to make up the difference, which is also a huge problem and we can agree magnified the poor accounting and mathematical expertise of those who ran our DB systems.

But this can be fixed without throwing the baby out with the bathwater…. keep DB but lower the benefits.

Actually, Captain, the last 6 months have been flat to slightly up, not “dismal”. The fund had $225 billion in January, so even with the market decline the past few months it still shows positive performance calendar year to date—and a very healthy performance fiscal year to date.

Of course, last year every prognisticator was pointing to the markets down 5% in May and 8% in June 2010, and predicting a double dip recession was about to happen. The 16% CALPERS return since those two months in 2010 proved that wrong….

Also, CALPERS is lowering the risk of its’ portfolio, not increasing it as you claim. They introduced two hedging strategies to protect against liquidity risk and inflation.

Matt, I think any decision made on 1 or 2 or 5 or 10 years of stock market performance is unwise.

The main characteristic of stock market performance is volatility. It doesn’t and never has provided regular 7% (after inflation) yearly gains, or 4-5% (if bonds are included) yearly gains after inflation.

At 30-year holding periods you start to get some regularity, but new problems arise, like the impact of globalization, technology shifts, etc.

All our State pension funds made extremely poor decisions in the 1980’s and 1990’s based on stock market gains that are now most likely the result of randomness. Any new claims of risk reduction are mostly high priced managers making up rhetoric that justifies their salaries and that will be forgotten soon enough… pure politics where no-one every loses if their advice is wrong.

So, while it is true that `invest you must’, the real issue is that politics and a famously volatile investment arena don’t mix well, and we end up victims of confidence men and women.

I’d strongly suggest all our RS be moved to very simple index funds… they perform as well as 90 or 95% of money managers, are totally transparent, are free from the confidence artist rhetoric, and free us all from the toxic finger pointing when either the market is high or low… we know it is randomness calling the shots.

And, we don’t have scandals like the current private equity payoffs to CalPERS… scandals that investment con artists have been successfully pulling off, well, forever.

Finally the cost of management is far, far less with index funds than with con artists and other investment managers.

CALPERS started July 1, 2010 with $201 billion dollars. Using your $232 billion as of today, that means they have earned nearly 16% return for their fiscal year. That would be double their assumed rate of return
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Right Matt, and CalTURDS had a NEGATIVE 36% ROI in 2008 (28% actual loss-8% loss of assumed ROI) , add in the growth it SHOULD HAVE HAD and it should be at $350 billion today, yet is barely at $220 Billion, so it is STILL down by 50%.

CalTRDS ROI the last 10 years is 2.41%, or about 30% of it’s assumed ROI over a whopping 10 year period.

Here is an idea Matt-if YOU and your scamming public employee buddies want to go gambling with YOUR pension fund money-go for it-but keep your fat, greedy, sneaky little fingers out of the taxpayers pocket when YOUR money goes down the tubes like it did in 2008.

Also, CALPERS is lowering the risk of its’ portfolio, not increasing it as you claim. They introduced two hedging strategies to protect against liquidity risk and inflation.

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Matt-thanks for the laughs! I like public employees like you to post these whoppers so I can shoot them down.

CalTURDS has been INCREASING their risk every year, doubling down to try to hit that 7.75% discount rate. In fact their OWN actuary wanted to LOWER the discount rate from 7.75% to 7.5%, but the BIASED, public employee dominated board refused their OWN experts recommendations.

That kind of fraud goes along with the fraud of SB400 (aka 3%@50) they pushed in 1999, which is what caused this mess.

Here is a great idea Matt-you can tell your bogus public employee whoppers all day long when YOU and YOUR co-conspitator frauds in the public employee unions start back stopping YOUR pensions-how does that sound Matt?

But as long ad rip off artists like you come out in the public floating whopper lies I am going to shoot them down all day long.

Finally, they are reporting the funding level for the overall plan is once again approaching 70%.

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LOL…more whoppers.

NO ONE is claiming CalTURDS is at a 70% funded level, no one except CalTURDS and their cronies who are in it and benefit from their fraud-like you!

CalTURDS is at a 46% fudned level, WELL BELOW the 80% that is the lowest level considered to be safe. 46% is a bankrupt %.

In California actuarial methods show the Public Employee Retirement Fund (CalTURDS) at a funding ratio of 81 percent but when private sector market valuation is applied to Calpers, the funding ratio drops to 48 percent, according to the Bigg’s study. Likewise, California teachers’ funding (Calstrs) ratio under current actuarial methods is also 87 percent, as opposed to 46 percent when private sector market valuation is applied.

Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered “endangered,” while those below 65 percent are classified as “critical” under the Pension Protection Act of 2006.

CalTURDS is beyond “critical”, it is basically DOA.

Like I said Matt-I can shoot down your whoppers all day long, keep em coming lil buddy!

Glad to see you posting here , becaue if there ever was a consistently mistaken and clueless person, it is you.

Why don’t you regale the board with the repeated claims that you posted on the OC Register Board about your hero John Moorlach’s suit to roll back the retroactive increases for deputy sheriffs. You posted incessantly that he would win: when he was boiunced out of court in the Superior Court, at the Court of Appeals, and then the Supreme Court. Your diatribes there just made you look, shall we charitably say, foolish.

So, no Rex, most don’t really care what you ramble on about. You have zero credibilty, just mired in ignorance and bitterness. tThere isn’t any point in responding point by point to you—you don’t have the mental faculties to understand.

However, for those genuinely interested, the link to the CALPERS portfolio analysis, as well as simple google searches, wiil provide those who want to know the facts.

Glad to see you posting here , becaue if there ever was a consistently mistaken and clueless person, it is you.
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Matt-you have no idea how much this hurt me-I am crushed 🙂

Please respond to my arguments on 1) SB400, 2) retroactive pension increases, 3) current employee contribution rates, 4) CalTURDS 48% funded level, 5) not lowering the 7.75% ROI to 7.5% as the funds own accountant asked, 6) the average CalTURDS pension for a full career employee being $68K plus $25K in edical, 6)…..and….well you get the picture. Make an argument on why I am wrong.

Thanks for the link. I’ve read it and have some additional questions that I’ll pose a bit later. For now I would like to discuss the proposed GASB rules regarding pensions.

IA friend of mine sent me an email about the proposed changes to the GASB accounting rules regarding pension plan accounting, and also how municipilaties account for their unfunded pension debt. The proposed changes sound like a step in the right direction, very interesting, and probably long over due. While I’ve learned quite a bit about pensions in recent months I’m still learning. I’m hoping to get comments from people on both sides of the argument.

Tough Love, Rex, spensions, Matt, Bogey, and Mr. Mendell, if you could take a moment to read the link and provide an opinion I would greatly appreciate it. My friend calls this a Game Changer. What are your thoughts?

“Actually, Captain, the last 6 months have been flat to slightly up, not “dismal”. ”

I’ll agree with that but it doesn’t make me feel any better.

“The fund had $225 billion in January, so even with the market decline the past few months it still shows positive performance calendar year to date—and a very healthy performance fiscal year to date.”

My question to you is, while it appears to be a healthy return, is it really a healthy return? Here is how I look at it (and I’ll assume that calpers is 68%% funded on an MVA basis). If the target is a 7.75% return (net), and that is based on the assumption of 100% funding, then what return rate is actually required if you only have 68% of the assets to invest?

The answer is: Calpers needs to return 11.4% just to keep the the unfunded liability from growing. I understant that, coming off market lows, that calpers has been able to achieve strong gains (I haven’t seen 16% reported). The “dead cat bounce” isn’t a reason to celebrate especially in light of the past six months. Do you really think that CalPers can achieve that number over time? Here is information from the link that you provided:

“At the November asset liability management workshop staff presented eight viable asset mixes with expected returns that ranged from 6 to 7.49 per cent. From the most conservative bond-centric A1 to the equity-dominant A8, each target was expected to be the least risky for its target return. The existing policy portfolio for the fund is most similar to A7.”

What that tells me is that Calpers is expecting something less than a return of 7.49%, while accepting a risk level of 7 on a scale of 1-8. If they are expecting a return of less than 7.49, and were considering lowering their assumed rate of returm to between 7 3/8 & 7.5%, why didn’t they do it?

I think it was the head of the CA SEIU that stated, while refering to the rational behind not lowering the assumed rate of return, and ignoring their own actuaries advice, and the advice of independant consultants, and common sense, and their returns over the past decade of less than 4%, “we didn’t want to add fuel to the fire.” When did matching current expense to current revenue/earnings give way to what some union reps wants? It was the unions that voted against lowering the assumed rate of return. The strategy of deferring costs to keep from upsetting the taxpayers is one of the reasons we’re in this mess to begin with, IMO.

“Chief investment officer of CalPERS, Joe Dear, said: “You can’t get solid returns without taking risk, but we want to make sure we know what that risk is and that we’ll be paid to take it. We have applied the best thinking and our best judgment to the challenging questions about how to uphold the promises we made to our beneficiaries to make their retirement secure.””

– what about the promises they made to the taxpayers when they were promoting SB 400? I don’t understand why the taxpayers have assumed 100% of the risk and the unions receive 100% of the reward. If the pensions were 132% funded in 1999(?) according to Calpers, then the cost to cities should have been reduced. This wasn’t the unions money – it was taxpayer money to cover the promised benefits. I think the unions considered this their money – it wasn’t, and wanted a distribution. Why was calpers promoting the union agenda?

As TL said:

“What still amazes me is that taxpayers don’t scream bloody murder that CalPERS, whose PROPER roll should exclusively be that of Plan administrator, investment manager and fiduciary, has morphed into one of Participant advocate.

It’s obligation to TAXPAYERS should certainly be superior to those of the participants.”

Captain… I don’t understand why that GASB proposal would use distinct discount rates — one for already existing funds (a higher rate), and a separate one for yet-to-be contributed funds (a lower rate).

A dollar is a dollar is a dollar.

That part of the change looks entirely political to me.

The real problem is the whole concept of discount rate *at all*. The fact is that future investments are incredibly volatile, and don’t match the `smooth model’ implemented with the discount rate concept.

And so back in 1999 CalPERS thought it was, what, 132% funded? But that was based on faulty concepts, there were never really 132% funded, they were at the crest of a big wave, but their math didn’t have the concept of a wave at all in its foundations.

The strange part is that with the amazing computing power available now, all sorts of useful simulations can be done and are being done… see http://www.crsp.com/index.html .

But our pension managers, who BTW usually earn many $100,000 of dollars/year and who are courted by all sorts of private equity con artists, aren’t educated enough to implement appropriate simulations.

And so that is why now we are down at 60 or 70% funded… BTW, in actual fact, we are probably just at the trough of a wave. But if you don’t have the concept of volatility accurately portrayed in your modeling, you can’t realize that.

“Captain, you are wrong. CalPERS judiciary duty is to the members. Non-members and members are all in the same group–as taxpayers.”

– Can you elaborate on why you think that is?

“Non-members and members are all in the same group–as taxpayers.”

– I understand that we are all taxpayers. Aren’t some of us, the “members”, net tax dollar consumers while others are net tax dollar payers? It doesn’t seem, to me, that our interests are aligned. For example, an increase of a 1% sales tax costs me an additional 1% of all taxable purchases. That same 1% would cost the public employee union member the same amount but it would also increase the pool of money that paid their wage. For that person the 1% sales tax could be, and has been, a net gain.

Thank you for the response. It probably takes me a bit longer than most of you to digest the comments/feedback. I’ll read your link a bit later and probably respond to your post tomorrow. I appreciate the discussion very much.

Captain, you are wrong. CalPERS judiciary duty is to the members.
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That’s right seesaw, CalTURDS has a DUTY!….and they are BREAKING that “fiduciary duty” (not judiciary duty) by GAMBLING the members fudns away on high yeild HIGHER RISK investment when they should be limited to treasuries.

Like I said-if you clowns want to let your clown pension fund roll the dice on Vegas style investments no problemo-but YOU need to back stop the inevitable losses, not the poor and middle class taxpayers.

It’s fiduciary obligations DO NOT include (and it is absolutely inappropriate for them to be) advocating for increases in pension benefits. This is NOT it’s proper roll …. that’s the roll of the Legislature.

The Legislature’s roll is to DECIDE what are the appropriate level of benefits for gov’t workers (NOT to advocate for increased benefits).

Advocating for increase benefits is a Union roll (along with deceit, lying, bribing and threatening officials, dragging big inflated rats around the State, and generality being the biggest parasites and leaches that ever existed).

TL, legislators must decide what they advocate, before they can decide on what benefits to support. I was a union member for about 20 years, and never saw any of my cohorts or union reps threatening or bribing any public officials. You are pretty much blanket, libeling public employee, union members, when you refer to them as parasites and leaches. I think you have your description of union members confused with what is probably a true description of yourself.

The value of “unfunded liability ” is all employees who can collect do… all at once.

If it is reasonable to assume that all tenured employees can and will retire at once then shouldn’t we be paying greater attention about what to do when there is no one left in there’s positions but people hired with less than five years on the job?

What would it look like if WE had to pay that big number, every employee that qualified quit? Who would be left?

If we value our the people that serve us and the service that is provided shouldn’t we focus on the bigger picture

Rhetoric is useful to purge the soul but well beneath the capacity to solve problems. I suspect problem solving is not the purpose of this conversation or this site.